The cost of accountability

A projected multibillion-dollar gross domestic product (GDP) contraction and hundreds of millions in recurrent revenue losses due to the impact of COVID-19 and Hurricane Dorian naturally necessitate adjustments to government priorities.

Among the casualties of economic fallout are long-awaited as well as established mechanisms of accountability and transparency, whose importance is heightened as a result of record-breaking borrowing and post-disaster expenditures.

One such casualty in the upcoming fiscal year appears to be the oft-promised full enactment of the Freedom of Information Act, which by law requires the establishment of the Office of the Information Commissioner, which may also include the appointment of a deputy commissioner, assistant commissioners and staff.

No provision has been made in the 2020/2021 budget for the establishment of this office, which was promised during better economic times, but whose future appears less and less certain in this term in office.

A second casualty is upcoming allocations for the Office of the Auditor General.

The auditor general is the people’s auditor – independent in the execution of his or her functions – whose constitutional mandate is to audit and provide reports on the accounts of all departments and offices of the government as well as offices of the judiciary.

In the current fiscal year ending June 30, the office received an increase in allocation which enabled it to fund necessary outsourcing of work to external auditors, according to Auditor General Terrance Bastian in an interview with Perspective last year.

The outsourcing is necessary as the office would require substantial increases in allocations to its personal emoluments in order to hire additional qualified auditors.

Its allocation for external audits in the upcoming fiscal year has been slashed by 67 percent, from $300,000 in 2019/2020 to $100,000 in 2020/2021.

When borrowing increases, new ministries are created such as the Ministry of Disaster Preparedness, Response and Reconstruction and its Disaster Reconstruction Authority (DRA), millions in disaster donations are received and new modalities are created to provide financial assistance to the public, the country needs more audits, not less.

Speaking to us last week in response to our questions on how his office will adjust to upcoming cuts to external audit allocations, Bastian said, “We accepted that in the initial discussions because everybody had to find a cut, but in the discussions they realized that they really cannot be cutting the audits especially at a time as this where audits will be needed to make sure we have transparency and accountability.”

In those discussions held with Acting Financial Secretary Marlon Johnson and Finance Minister Peter Turnquest, Bastian said his office was given the indication that contingency funding could be made available in the event additional funds are requested, a request which the auditor general said will likely occur in the second half of the upcoming fiscal year.

The Minnis administration pledged to introduce legislation to strengthen the Office of the Auditor General and to provide it with the necessary resources.

Such legislation has not materialized.

Examples of legislation that strengthens the powers of the country’s constitutional auditor can be found in South Africa, which has legislated powers that enable the auditor general to report findings of corruption or fraud directly to law enforcement.

The Bahamas’ auditor general presents his or her reports to the speaker of the House who tables the same, but there is presently no legislation that requires the government to act on the findings of those reports.

Before the end of the current fiscal year, Bastian said his office plans to submit an audit on the Bahamas Department of Corrections for the year ending 2019, Family Island audits and two international audits.

We questioned him on when his office plans to submit an audit report on the accounts of yearly constituency allowances paid to parliamentarians, which is not to be confused with the $100,000 constituency capital grant allocated for each constituency.

Parliamentarians receive $30,000 each year, which the Parliamentarians Constituency Office Allowance Act states is to be used for “the establishment and maintenance of a constituency office”.

Proper accounts and receipts for the funds, whose use is prohibited for the financing of “any public political meeting or fund raising activity for any political party”, are to be kept by each MP for audit by the auditor general.

Bastian said those audits are “due and will happen, and are on our current schedule.”

As for the DRA, the Disaster Reconstruction Authority Act contains a curious provision.

Section 11(2) of the act states: “The accounts of the authority for each financial year shall be audited by an auditor appointed by the minister after consultation with the authority.”

This is hardly a provision whereby the appearance of accountability and transparency exists, and ought not have been legislated as it shields the authority entrusted with millions in donated and public funds, from the ambit of the auditor general.

Solidarity with the citizenry

Following upon the Great Recession of 2008, the then FNM administration instituted salary cuts for all parliamentarians in its 2010/2011 fiscal year.

The prime minister received a 10 percent cut in salary, all parliamentarians including senators received a five percent salary cut and the duty allowance of all ministers and the House speaker was cut by 50 percent.

The International Monetary Fund (IMF) recently referred to the economic impact of COVID-19 as the worst downturn since the Great Depression and here at home, the pandemic response ground the nation’s economy to a halt.

Around the world, governments in solidarity with their people who have suffered job losses and salary cuts as a result of the pandemic’s impact, implemented salary cuts for cabinet ministers and parliamentarians.

But it’s a gesture of solidarity the Minnis administration chose not to offer its people, even in the face of this nation’s largest economic crisis.

In our region, St. Lucia’s cabinet will take home only 25 percent of their salary in the new fiscal year.

New Zealand’s cabinet will take a 20 percent pay cut; India’s cabinet and parliament a 30 percent salary cut; and Ecuador’s president and cabinet will take a 50 percent salary cut.

In Africa, South Africa’s cabinet will take a 33 percent pay cut for three months; the governments of Rwanda, Nigeria, Kenya and Botswana will forego months of salaries; with Malawi opting for a 10 percent salary cut for cabinet.

The Maldives will cut salaries of all political appointees by 20 percent; Singapore’s cabinet will forgo one month’s salary; and the governor and cabinet of the U.S. state of Minnesota will take a 10 percent salary cut.

When questioned during last week’s Ministry of Finance budget press conference on why the Minnis administration did not make similar moves, Turnquest responded, “If you were to take a cut across the 39 members of Parliament, it would be insignificant in terms of the challenge that we face.”

Regrettably, Turnquest missed the point of why governments opt to exact salary cuts for cabinet and parliamentarians whose salary is paid by the very taxpayers suffering most significantly from sweeping financial upheaval.

If the Minnis administration had at least matched the salary cuts made when its party was last in office, it would have amounted to approximately $124,000.

And if its cabinet ministers opted to take even a five percent cut in pay, that amount would increase to approximately $177,000.

A meager sum in comparison to the size of the country’s current and upcoming fiscal deficits some may argue, but it is at least enough to have been allocated to perhaps the Office of the Auditor General, so as to guard against interruptions in the essential role that office provides.

A small price to pay for accountability.

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